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SACRAMENTO — Citing a slowing economy and fiscal fallout from the Sept. 11 terrorist attacks, Gov. Gray Davis on Thursday ordered state agency heads to prepare to cut their budgets by 15 percent next fiscal year. 

Only public safety and firefighting departments would be spared from cuts. 

“There is no question that our economy is now experiencing the full impact of the national economic slowdown,” Davis said. 

He ordered state agencies to submit budget cut proposals to his office by Oct. 22, and said he will convene a special meeting of his cabinet the following day to discuss the proposals. 

The state is facing its bleakest fiscal picture and deepest budget cuts since the recession of the early 1990s left California with a $14 billion budget hole. 

“We’re under no illusions, it’s going to be very painful and there are going to be some very difficult choices,” said Sandy Harrison, a spokesman for Davis’ Department of Finance. 

Davis will consider each department’s proposal on a case-by-case basis when crafting his budget plan for the 2002-03 fiscal year, Harrison said. Davis will release his budget plan in January. The state’s fiscal year begins July 1. State officials were stunned Thursday by the announcement, and some said 15 percent cuts could mean staff layoffs and reduced services. 

“It’s very depressing, and if we in fact have to accommodate a 15 percent cut in our budget, it’ll be devastating to the program,” said Peter Douglas, executive director of the California Coastal Commission. 

Doug Stone, spokesman for the California Department of Education, said, “Fifteen percent isn’t just a matter of further belt tightening, it goes to hitting the bone.” 

Roy Stearns, a deputy director in the state parks department, agreed, saying that 15 percent “is a sizable amount, and we’ll have to look at it very closely.” 

But Stearns and Douglas acknowledged that cuts will be unavoidable in the current fiscal crisis. 

“I also understand the sad condition of the economy and the country right now, and if the cuts are necessary then we all have to do our part,” Douglas said. 

Assemblyman Tony Cardenas, an Arleta Democrat who chairs a special budget committee, said his panel will hold hearings in November to address the cuts. 

California is not alone in its budget troubles. 

Several states, including Florida, Nebraska and Connecticut, are calling or considering special legislative sessions to deal with steep revenue losses in the current and coming fiscal years. 

“This year has been unlike any other year, except for perhaps the ’90-’91 recession,” said Arturo Perez, a budget analyst for the National Conference of State Legislatures. 

Davis has said he may ask the California Legislature to convene a special session, and he is planning a summit with business and labor leaders to discuss the effects of the Sept. 11 attacks on California’s economy. 

He said the terrorist strikes likely will damage an already-slow economy that was particularly hard-hit by the recent implosion of the high-technology industry. 

Davis previously had asked departments to prepare for budget cuts of up to 10 percent. He also vetoed several dozen bills this week he said would have increased state spending. 

The state’s budget contains a $2.6 billion reserve, the largest in two decades, but the sagging economy is projected to cut state revenues by far more. Revenues were down by more than $1.1 billion in the first three months of the fiscal year. 

Now, the attacks have “injected even more uncertainty into our economy and we must prepare for greater revenue reductions as a result,” Davis said in his memo to the cabinet. 

In addition, Davis is struggling to find a way to repay the more than $6 billion the state spent this year to buy electricity on behalf of three cash-strapped utilities. The state Public Utilities Commission last week derailed his proposal to repay the state’s general fund with long-term borrowing. 

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On the Net: This year’s budget can be found at http://www.dof.ca.gov